Ease restrictions, gov’t urged

FOREIGN BUSINESS chambers want the government to make its Foreign Investment Negative List (FINL) “less negative,” claiming that little has been done over the last two decades to open up protected sectors.

While they noted that the latest negative list — detailed in Executive Order 98 last month — had not increased restrictions, they said public officials “had yet to assign priority to shortening the list, with the exception of the economic provisions of the Constitution.”

The Joint Foreign Chambers of the Philippines (JFC), in a statement, said it was urging the government “to be more proactive before the 10th FINL in 2014 make the FINL less negative.”

It said the list, which is revised every two years, has seen just two major changes since the approval of the 1991 Foreign Investments Act: the 2002 Retail Trade Liberalization Act, which opened the sector to investors putting in at least $2.5 million, and the 2010 FINL (the 8th), which allowed 100% foreign equity in gambling ventures inside government-administered economic zones.

While the introduction of the FINL in 1991 was described as having improved transparency, the JFC said over the years it “rarely contains any significant reforms”. It also noted that restrictions on banks are not covered by the list since the sector is governed by separate legislation.

A quick reform, it said, would be the removal of the “practice of all professions” list as this not relevant to investments. Other laws, it noted, allow for reciprocity — a matter not explained in negative list.

The Philippines, the JFC said, already needs to lower investment barriers under the planned ASEAN Economic Community. It noted that challenges could arise as the country eyes entry to trade deals such as the Trans-Pacific Partnership.

The limits, it claimed, are the reason why the Philippines has taken in fewer foreign direct investments compared to its Asian neighbors.

The JFC is composed of the American, Australia-New Zealand, Canadian, European, Japanese and Korean business chambers in the Philippines, and the Philippine Association of Multinational Regional Headquarters. — ENJD, Businessworld